getting to be too much. you know who else is on the move? everyone who lives in the suburbs. no, really. this is a thing. but guess where you'll always have a home? here at "the cycle." it is now 9:00 in egypt, where the entire country is in a state of emergency. a curfew is taking effect. mass sit-ins supporting ousted leader mohamed morsi today ended in violence. 1400 are injured. at least 150 people are now dead. that number is expected to hit 300 as the health ministry continues to count bodies held in field hospitals. among the dead now, we know, are two journalists. a sky news camera man and a reporter for express newspaper. security forces have more than 500 people under arrest, including egyptian, palestinian,

syrian, and american nationals. in addition to the month-long state of emergency and tonight's curfew, the military has expanded power to help local police say they will restore order. just 30 minutes ago, in fact, u.s. secretary of state john kerry said the promise of the arab spring itself in egypt has now been deeply damaged by today's violence. >> violence will not create a road map for egypt's future. violence only impedes the transition to an inclusive, civilian government, a government chosen in free and fair elections that governors democratically, consistent with the goals of the egyptian revolution. and violence and continued political polarization will only further tear the egyptian economy apart. >> we start today with nbc news foreign correspondent ayman mohyeldin inside cairo. what can you tell us? >> reporter: well, the curfew is just going into effect now. the egyptian government was being very serious about anyone

who violates that curfew, saying they would be immediately imprisoned. part of the state of emergency that has been declared also suspends the rights of civilians to have trials or for that matter due process. so you can expect a lot of criticism from human rights organizations and other activists over the fact that the interim government has now declared this state of emergency. it comes on the heels of a very bloody day, one that the muslim brotherhood and their supporters are calling a massacre. they say that close to 2,000 people may be killed. now, that number is impossible to verify. what we do know is that there are a lot of bodies that remain in various field hospitals near the sit-in protests. many of them have yet to be officially confirmed as dead by the ministry. we expect that number to rise, as you mentioned. the key issue today, what is the government going to do? we have already seen some cracks in the interim government. the country's vice president, he has resigned in opposition over what has happened here. that is an indication that the

interim government may be already struggling. the question also on everyone's mind is how exactly is the situation going to unfold from the perspective of law and order. the egyptian armed forces have now been called upon to augment the police in restoring is law and order here in cairo and across the country where security remains extremely volatile. there are already marches and protests being organized by supporters of the muslim brotherhood in response to what happened today. so indeed it is a very rapidly escalating situation. as we head into these early hours of the curfew, it is going to be a major test to the police and to the government whether people here abide by it or not. ari? >> ayman, thank you for that reporting. please stay safe out there. joining us now, former u.s. ambassador mark ginsburg. ambassador, walk us through what's happening here and how significant it is with regard to the transition from the morsi government to this interim

government. two thoughts for you to help us understand what's going on. one, president morsi was accused of suspending certain rules himself. now we're seeing the military suspending many similar rules and putting out all these statements about trying to control the streets. two, what happens to the muslim brotherhood in this context? are we seeing the end of any hope of a true democracy? >> well, ari, it puts the death now in egypt so to speak, in the ability of islamic politics to play a democratic role in the future of the country. so that's point number one. point number two, it probably reverts the muslim brotherhood back to adopting some semblance of violence, which it had renounced in the early '80s at the time that president saddad had been assassinated. that led to general mubarak to become president mubarak. number three, the cracks in the civilian provisional government with the resignation of the vice

president is an indication that the military has taken these steps notwithstanding hesitations that constitutes this provisional government right now. finally, most importantly, the question is where does egypt go with respect to the vast majority of egyptians who wanted to see the military take action against these encampments by the muslim brotherhood but probably is revolted by the sheer magnitude of the attacks and bloodshed taking place not only in cairo but across egypt. >> ambassador, you're talking about these encampments that the muslim brotherhood had set up. they were quite extensive, including hospitals, markets. they were there clearly for it the long haul. this bloody crackdown, what the muslim brotherhood is calling a massacre, will that actually serve to break up these encampments, or will that further entrench them in commitment to their cause? >> let's revert back and try to

use analogies. the military is going to try to move in here, clear these camps, not only in cairo, but across egypt's major cities. they'll probably arrest the leadership of the brotherhood that already had not been arrested. this raises a serious question about the extremist elements of the islamic faith that have played a marginal but nevertheless supporting role here. where do they go? i would say the best way to answer this question right now is that no one can tell whether or not the state of emergency and the curfew will be honored. inevitably, this may lead to more bloodshed. that's really the danger here. >> ambassador, i want to ask you about the united states' role in all of this. obviously the last thing we like to see is a democratically elected president get ousted. i want to ask about our influence. we just heard from secretary to have state john kerry. we know john mccain and lindsey

graham just returned from egypt. what significance, if any in your mind, do we have on the situation, assuming that violence is just going to continue to rise? >> well, unlike 1979 where the sha of iran said don't fire against the people rising up against him, the general in charge essentially sent senators mccain and graham packing and essentially told the administration publicly in no uncertain terms, we're not interested in the role that you play. do not try to mediate. america has lost too much influence among us. you no longer stand by us. it was quite a message to the obama administration that its support, at least within the militar military, was evaporated. >> given what you just said, the birth of a democracy is and has always been a rather messy and bloody process. so in terms of action, can the obama administration be reasonably expected to do

anything other than this? do we have that tape? >> the world is -- what is happening in cairo. we urge the government in egypt and all parties in egypt to refrain from violence and resolve their differences peacefully. >> basically issuing a statement. is the president right to keep the united states at arm's length from what's happening in egypt? >> the president has to navigate the anger and resentment that's now felt on both sides of the equation in egypt. let's remember, we have a stake in egypt's stability for the regional goals and objectives of u.s. foreign policy, jonathan. not only the camp david accords, not only its role in counterterrorism against islamists and terrorists throughout north africa, but also as a center of stability, relative stability in this arab spring. so the most important leverage we have is the economic leverage we have over the future of egypt's economy and the need of the egyptian military to borrow vast sums from multilateral

institutions to support its economic renewal. that's going to be the leverage, not the military aid. >> ambassador, a tough day for egypt and the egyptian people. thanks for spending time with us. >> sure. up next, president obama is watching developments closely from martha's vineyard. we'll check in there as "the cycle" rolls on for wednesday, august 14th. i don't make any decisions about who to hire without going to angie's list first. with angie's list, i know who to call, and i know the results will be fantastic! find out why more than two million members count on angie's list. angie's list -- reviews you can trust.

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summer love. that's what president obama hopes to get on his return to washington next week. but for now, the president and the first family continue their

summer vacation in martha's vineyard. of course, you already knew that. >> some new video of the president in martha's vineyard stopping to pick up lunch at a popular spot in the community of oak bluffs. >> and today's breaking news concerns onion rings, fried oysters, and french fries. >> whether it's the president hitting the golf course, the lunch and the dinner menu details or michelle and barack's alone time, we're on top of it all. let's bring in nbc's kristen welker who's on martha's vineyard with the president. kristen, what did the president have for lunch today? >> reporter: well tha, that is l a big question mark. i'll get the breaking news as soon as i get the readout from the white house. as you pointed out, he had a lot of fried food yesterday. fried shrimp, fried oysters, french fries. i think he's working some of that off today. he's on the golf course as we speak. this is his third game of golf since he started vacationing here on martha's vineyard over the weekend. the white house has pointed out,

though, that this is a working vacation as well. president obama was briefed this morning by his national security adviser susan rice about the ongoing unrest in egypt. his deputy press secretary came out and briefed reporters for the first time during this trip. josh earnest telling us that the white house condemns the violence in egypt. of course, we just heard similar comments from secretary of state john kerry. we also had a quite extended briefing with earnest. he said that, look, the white house continues to review its $1.3 billion in military aid that it gives to egypt. when he was asked what the white house can actually do to stop the violence in egypt, we didn't get a really clear answer on that one. but clearly this is a situation the president is monitoring. he's also dealing with sort of ongoing challenges to implementation of his health care law. of course, he's trying to determine who the next fed chair will be. so those are some of the working parts of this vacation. but he's getting plenty of r&r

as well. we're told the girls will arrive later this week. as you said, they're still away at summer camp. i expect there to be some trips to get ice cream, maybe even a trip to the bookstore. >> we'll be watching for that. so many details. thanks, kristen. does look beautiful there. hope you're taking a little time for yourself as well. >> reporter: we are trying to. it is gorgeous here. >> all right. with only four more days until the first family returns to washington, the president hopes to reset talks with the gop over many issues they left unresolved. the most pressing, of course, the battle over the national budget. so let's bring in business insider political editor josh barro. you write about the new jobs plan in your latest article. i want to talk to you, though, about setting the reset button, both for president obama and john boehner. that's what everyone's hoping for. we can come back from vacation, we can begin talks again. is resetting the button actually a reality? >> well, i think it really depends on the republicans. that's basically what president obama is waiting on.

the republicans have been talking about what are they going to demand in exchange for passing a bill through the house that keeps the government open after september 30th. there was this talk about should they insist on defunding of obama care or one-year delay for implementation. i think the question is, is there any bill to keep the government open that can pass the house with 218 republican votes? you have the split with people far on the right who don't want to vote for anything to fund the government or would only vote for something so extreme it's politically impossible. then you have people closer to the political center who are afraid of the ramifications of passing a bill that, for example, insists on obama care defunding and leads toward a government shutdown. if you end up with a situation where republicans can't pass anything and they depend on democrats, that may give the president and democrats in the senate a lot of leverage to dictate the terms of what next year's budget will look like. really, it's the republicans driving the bus here deciding what this process will look like. >> that's interesting. the folks at nbc's "first read"

had a piece yesterday that said speaker boehner is desperate for some sort of legislative accomplishment he can point to, to show that he and his colleagues can govern. quite frankly, i wonder if the speaker is on a fool's errand. as we all know, many of his colleagues believe they were elected to not govern, to stop government from functioning. >> right. and they face a different incentive set than boehner does. to get re-elected as a republican for most of these districts, you don't need to show you can put forward an agenda that is popular with a majority of the country. you just need to be able to go up there and say i voted to defund obama care 40 times. that's good enough for them. the question is what's good enough for boehner. i think he would like to be remembered as a better than incompetent house speaker. just because that would be nice for john boehner doesn't mean his caucus is going to go along with him. >> excellent point. in turning to the president's side of the equation, he said famously during the campaign he thought the gop fever would break after he was elected and

he would be able to actually get things accomplished. so far, we haven't seen a whole lot of being able to work with them and actually move things forward. we do have some reporting from "the washington post" and politico today about education initiatives the president is undertaking with his executive authority not having to go through congress. we've seen him taking this approach in a couple other areas as well. is that really the play for the president, sort of to give up on congress and do what he can by himself? >> i think that's part of the play for him. i think on these big budget issues, he's going to have a lot of difficulty reaching constructive deals with congress. i think there are other economic issues where there is the possibility of bipartisan agreement. i think, for example, on fannie mae and freddie mac, a reform of those to move toward a private mortgage market. i think there may be some opportunities on trade and on some other issues. it's not like there's going to be literally nothing constructive that comes out of congress. i also haven't completely -- i'm not completely writing off immigration, although i think the road for it looks very

difficult through the house. i think there are enough republicans interested in doing something that you might get something constructive through the house on that. i think on most economic policy issues, the president really needs to be looking for things he can do directly through executive action. >> josh, i want to ask you about this whole libertarian populism discussion that's been going on. it's nice to see you here in the middle of august. i know you had the choice between martha's vineyard and "the cycle." i think you made the right call today. >> i mean, martha's vineyard is overrated compared to this. >> fried oysters are delicious. i think we can agree on that. >> we can. >> you know, there is this interesting thing happening. we've been told a lot about all the divisions and abby is certainly right that barack obama and john boehner have a hard time working together. we saw rand paul and eric holder get together. we've seen a lot more popularity for libertarianism this week. what's that about? >> well, i think broadly republicans are realizing that their economic agenda isn't popular, and they're trying to find ways to adjust it or reframe it to make clear that they care about middle-american

interests. one of these is this libertarian populism idea where you say we're going to stand up to the ways that big government gets together be big business and enriches people who are already rich. i think there are some winning issues there for republicans and even some where they can work together with democrats. this, you know, sentencing reform stuff, for example, that eric holder is working on is something that libertarians have long been pushing and i think they're having increasing success selling to both liberals and conservatives. the limitation is that most of the really important economic issues in the country are not actually about big government and big business getting together to enrich people who are already rich. when you look at something like social security or the tax code, it's about who's going to pay for things and who are these big government programs going to give benefits to on the individual level. there i don't think there is a really salable libertarian agenda. that said, i think you're seeing other ideas coming up also from, you know, the piece i wrote today was a plan out of aei that has a number of ideas for firms to hire workers, how to give

people incentives. you might give people a voucher for they live in an area with high unemployment that moves them to an area of the country with low unemployment. i think there are promising ideas here. the question is cobbling them all together into an agenda that looks kpre ecomprehensive. >> and some of the cyclical pieces have to be handled nationally. we have to go, so i'll pass it back to abby. >> we love having you here. thank you for dressing like we were at martha's vineyard. you look lovely. >> i appreciate that. up next, we're going to do what everyone else loves to do, hate the airlines. here's the view. you can see here high on top of the rock on this beautiful day in the city that never sleeps. here's how switching from going out for pizza to a digiorno pizza dinner from walmart can save you over $1,200 a year. the average pizza dinner out costs over $8.00 per meal. a meal made with digiorno pizza costs less than $2.30 a serving.

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the news cycle begins with the investigation into an explosive crash of a ups cargo plane in birmingham, alabama. the pictures tell the

frightening story, as do witnesses who say the plane missed the runway by half a mile. >> it was -- we saw smoke and debris like it was shredded across the field. so it was quite scary. >> both the pilot and co-pilot were killed. still no word on a cause. meanwhile, marriage equality officially comes to the military. starting next month, same-sex couples will be eligible for federal benefits. for couples living in states where same-sex marriage is illegal, the military will offer ten-day leave for those couples to get married in a state where it is legal. >> awesome. >> that's fantastic. it's been called the second most important job in politics, so of course it's a mockery. i'm referring, of course, to new york city mayoral race. this year's race headlined by professional sexter anthony weiner. last night they participated in their first live televised debate. it came on a day packed with big news for the new front runner, public advocate bill de blasio. he shot to 30% in the latest

quinnipiac pole. councilwoman christine quinn fell to second. weiner barely garnered double digits. wonder why? >> i've apologized for my personal behavior. the speaker refuses to apologize for overturning the will of the people, for the slush fund scandal and for the things in her professional record. that's the difference. >> let me just say, i think it's very clear to all new yorkers that neither me nor anybody else on this stage or any new yorker, quite frankly, should be lectured by anthony weiner about what we need to apologize for tonight or ever. >> was he texting during that debate? >> that was weird, wasn't it? >> yeah, but staying in the big apple, i got to say for the city that never sleeps, our commute is exhausting. in fact, a new report says new yorkers have the longest commute in the nation. the average time it takes to get to work, 48 minutes. that's 13 minutes longer than the national average. that's like ari's commute. that's the news.

now the spin. trust me, if we had 48 minutes to spin about this next story, it wouldn't be long enough. i mean, don't get me started. american airlines and u.s. airways today are fighting back against the justice department's challenge to their $11 billion merger. the feds claim it would result in less competition, meaning fewer flight choices and higher prices for all of us. the two airlines insist the merger would result in the complete opposite. well, here's what we do no know. if this happens, just four airlines would cover 85% of the u.s. market. >> wow. >> so let's spin about this. i don't know. i want to know what do we get out of this? >> what's in it for jonathan capehart? that's what the world wants to know. >> speaking of commutes and taxes, which the taxi fares go up in new york city, the consumers get something. they get more leg room. they get air-conditioning. they get credit card readers. but when the airlines merge, we get nothing. in fact, we get hit with fees, baggage fees. you got to pay more if your bags

weigh more. you've got to pay for food now. i mean, look, when airlines merge, we end up getting less, paying more for the privilege of being slingshot across the country in an aluminum tube. it would be nice to have more competition. a lot of the issues with the airlines have nothing to do with the airlines and has to do with technology. you know, air traffic and air travel would be much more efficient and much better if we had satellite-based technology where airplanes would be able to come in to airports more efficiently, faster. that would at least do something about the delays. as you can tell, this subject drives me absolutely nuts. i could keep going, but somebody stop me. >> you know what i will say? jonathan is probably one of the few that still dresses up to travel. i mean, gone are the days where you still dress nice to travel. but i want -- >> the days of pan am. do you remember that, kids? >> who? >> exactly. that was probably back in the '90s. you keep referring back to the '90s.

i'm kidding there. >> no, you're not. >> definitely not going to happen with these mergers. i want to pull up the fact you mention the earlier. this would mean four airlines. they would dominate over 80% of the market. that's exactly why the prices would go up and quality would go down. we're not even talking about higher prices in tickets. i remember i had a bag that was like two bounds overweight. it cost over $100. we're getting to a point where i try to find any way i can to get out of traveling because it's such a miserable experience. there can be a payoff if the merger is done right. we're seeing delta is now doing very well after they merged with northwest back in 2008. but i want to read this quote. this is from the united vice chairman jim compton. obviously, united and continental merged. put simply, some of our corporate customers took a detour while the road was under construction and we suffered for it. i think he puts it, i think, perfectly. we don't sit around and wait. if you have a bad experience, i'm sorry -- if you have a bad flight one or two times, i'm not going to go back to that airl e

airline. >> i want to the go on the record first as saying that air travel improved significantly for me when i did not have to make my 5-year-old take off her shoes anymore. you have no idea how long it takes me to get those shoes on her in the morning to start with. but this morning i was over at cranky flyer it blog, which i check in with every morning, as i think everyone should. brett snyder was saying the merger could have the impact of increasing competition. he says delta and united are now so much bigger and have so much more coverage than either american or u.s. airways. they're in a different class. neither american nor u.s. airways can adequately compete with those two alone. so the merger is necessary to keep them in a competitive class is the argument he's making. the other piece of this is it's an odd argument when the doj has already let all of these other mergers go through to now say, well, because you're coming after these other mergers, we're going to stop yours just because

sequentially they're after them so the market is already so consolidated. i have to say, merger or no, i don't have a whole lot of hope for a great customer service experience with the airlines. it's already pretty dismal, even without the merger. >> yeah, i think you put it well. snyder explains that concept. i strongly disagree because i think even if they have fouled it up so far, even if we have enough enforcement and there's too much monopoly power here which is obviously what affects prices and hurts consumers, when you look the at doj filing and their press release today, what they want to do is take these guys to court to prevent a merger that hurts consumers. they point out it's not like they're competing. it's not like american and u.s. airways are competing on routes. they're competing on about 1,000 routes directly. >> which means we have so many fewer options. >> exactly. this goes to a deeper which, which is, does capitalism work? it works when you have rules and competition. it doesn't work when the profit margins are there and the consumer power is not.

>> it's such a mess from the profit margins haven't been there is part of the problem. >> that is true. also, the small bags of peanuts. they're very small. >> i want an airline like the one in "soul plane." i'm sure you saw it. you've got first class. you've got business class. and you've got low class. >> abby huntsman loves "soul plane." >> i love it when ari talks about capitalism because you sound like a republican. i love it. >> bringing the worlds together. up next, speaking of profits, who's really profiting from the war on drugs? and why attorney general eric holder's announcement this week could change the game. it starts with something little, like taking a first step. and then another. and another. and if you do it. and your friends do it.

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attorney general eric holder's call to reduce jail time for nonviolent offenders has drawn lots of support this week, including a shoutout from senator rand paul. but not everyone is embracing the proposal. over the past few decades, the spike in the prison population has left state governments running out of jails. the government has then turned toment so pretty unusual solutions, a trend we explore in the latest edition of our "presumed guilty" series. >> too many americans go to too many prisons for far too long and for no truly good law enforcement reason. >> over the past 30 years, mandatory minimums and harsh sentencing have driven up the prison population by 700%. pop sis the attorney general says disproportionately impact the poor and minorities. as governments have run out of space to house them, they increasingly turn to corporations to pick up the slack. an advocate for criminal justice reform has visited hundreds of prisons.

>> the war on drugs was not a war on drugs. it was a war against black america. now in the past 20 years, you've allowed that war to be profited by private prisons. >> now, that entire report is at presumedguilty.msnbc.com. we're also going to take questions on twitter at #hum #presumedguilty. with us now is the director of "lockdown usa," a documentary about the war on prisons. >> thank you for having me. >> the first question is, what's wrong with companies running these prisons? >> what has happened is for president past 40 years we've waged a war called the war on drugs. it's failed miserably. 20 years ago as this war was waging and locking up black and brown americans across this country, private prisons said, wow, there's a business here. we can make money on this. think came in the game. we'll take your prisoners from you. you sell us to them at the highest price and we'll take them from you.

they started buying these prisons and putting them in private prisons. i'm a businessman. i employ 40 people. i appreciate business. as a business person, they said, let's cut our bottom line. let's make money off these people. services were cut. health services were cut. mental services were cut. now you're warehousing, you know, black and brown men, mostly men, across this country and making money off them. >> michael, one of the reasons why states, as you said, sold these prisons and these prisoners to these private companies, because they had huge budget holes to fill. one of the ways they could do that was to sell off the prisons. but aren't private prisons basically a way of the states not only washing their hands of the buildings but washing their hands of the responsibility that they have to those prisoners? >> sure. so the idea was like a good one. we can't front the money to build the prisons. we can't front the money to house these people, so you front the money. they fronted the money. now what's happened, not only did they front the money, they then lobbied for these drug laws to pass across the country. now the prisons have busted to the seams with too many

prisoners. they've bankrupted us. cca and the ga group are the two biggest private companies. in states like california, just two weeks ago we're forced to release 10,000 prisoners because they couldn't house them anymore because of inhumane conditions. they bankrupted us. they lined their pockets with gold. politicians are laughing at us. >> as you've said, it's these private prisons that have re-enforced this war on drugs and this war on black and brown americans. you've had a unique opportunity that many of us don't ever get in a lifetime to visit these prisons, to see what really goes on. what were some of the things that you can put in context for us that we wouldn't get the chance that really shocked you the most. >> i've travelled this country. i've gone from juvenile detention centers to death row and everything in between. what i've seen as i traveled this country, abby, is i've seen so many people go into prison as diseased, right, as drug users. this is what eric holder was discussing this past monday in

san francisco. they went in as diseased and learned how to become criminals in these prisons because it was survival of the fittest. these conditions in these prisons are so harsh. many are using the gangs to control the inmates because they don't have enough corrections officers to do the job. these guys go into prison, become criminals, come out of prison and destroy their communities because now they're real criminals. they came in drug users. they come out criminals. they go back in the system, the cycle over and over again. >> right. well, i think the problems here with the private prison industry we see in a lot of privatizing of social services. you have the same thing playing out in education. when you privatize education, the focus is on the bottom line, rather than the quality of the education and public good. i think we have the same dynamic there. one of the groups that the private prison industry has partnered with is the american legislative exchange council. they write these model laws that they then push at the state and federal level but particularly

at the state level. they've been behind a lot of the mandatory minimum sentencing that we saw eric holder addressing. they have now shifted where they're now opposing -- they want to roll back some of those mandatory minimums. are you seeing a broader political shift? do we have hope here that it's not just folks like yourself and folks on the left? is there a broader political consensus that we need to change? >> i never take a vacation. this is the first vacation i've taken in years. i drove back 2 1/2 hours to come to the show today because i think there is hope. i think there is a shift happening now. it is monumental what attorney general eric holder said on monday. not just monumental. no backlash. no law enforcement came out and said, that's a bad speech. no backlash. so there's a shift. we can no longer just be tough on crime. we have to be smart on crime. we no longer can afford to just lock people up and throw away the key. it's bankrupting us. if someone -- if you're mad at somebody, right, don't put them in prison. if you're scared of someone,

lock them up. if you're mad at someone, put them in rehab. if they did too many drug, put them in rehab, put a bracelet around them so you can monitor where they're going, but don't lock them up. >> before we let you go, cca says -- when i talked to them for this story, we reached out, and they said, look, yeah, we lobby but only to sell our services to the government. we're not for more prison. in an article online, we have their full statement. what do you say to that rebuttal from them? >> i think the cca has historically used the same folks behind stand your ground to lobby across this country and every state to get tougher drug laws to make more people go to prison. if cca is saying we don't lobby to get more prisoners, they're bad business people. >> look, we're out of time. if cca wants to come on and debate you, would you come on and do it? >> of course. >> great. michael, i know you've worked on this issue for years. we appreciate you coming down and spending time with us. up next, is suburbia dead? we're going to look at the world according to lee gallagher when we come right back.

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beaver." >> lemonade, yard work, beaver cleaver. there may not be a greater example of suburban life and the american dream. or at least what used to be the american dream according to our next guest. it is over for the suburbs, as shifting demographics, social priorities, and the economy have packed the american dream into a u-haul. here to tell us where that u-haul is going is lee gallagher, the assistant managing editor at "fortune" and the author of "the end of the suburbs" which is on shelves now. we talk about the recession and the housing crisis and know the suburbs have been hard hit. there's the assumption they'll come back at some point. you argue in this back that's not going to happen. >> that's absolutely right. yes, we overexpanded and built sort of like a hologram of too many houses, many of which actually did disappear. there are really long, simmering forces that have been grinding away for quite some time, almost

since the "leave it to beaver" era that really foretell the end of conventional suburbia as we know it. it's really dramatic and people don't realize this is happen pg. it's a profound shift because it affecting everybody. it affecting wherever you live, whether you live in the suburbs or a city or somewhere in between. these changes are going to affect you. they're profound. >> people want to be where the energy is. people want to be where other people are. i really could relate to your book as someone that grew up in the suburbs. i thought, i'm never going to live in new york city. i'm going to have a house and a car. that's the american dream i thought of growing up. i'm now in new york city. i don't see myself leaving. i don't want a car. i'm scared of even driving. i could see myself here for a long time. i have to ask the question, does the american dream look different, at least for this next generation than it did for the older generation? >> it looks different for everybody, actually. but it looks especially different for the younger generation, the millennials.

many grew up in the backseats of cars, having been driven around by their parents. they don't really want that. i say they. it's probably you guys. >> not jonathan. he's a bit older. >> you're a jen x'er like me. not to call you out. you're like lab specimen. seriously, younger people are getting their driver's license in far fewer numbers, which is totally shocking. i have an anecdote in the book about somebody whose daughter turns 16 or 17. he said, all right, ready to get your driver's license? she said, maybe next year. he was like maybe next year? it's all about being, you know, a good wi-fi connection and access to friends are the equivalent of today's '57 chevy. that's just one of a number of profound shifts between the way things used to be during "leave it to beaver" and "the wonder years" and the era where the suburbs were born from and now. it's not all about, you know -- this doesn't mean that everyone is going to move into a skyscraper in manhattan. that's not the way most people want to live. a big part of the change is going to be urbanizing the

suburbs that can be urbanized. >> which you're already seeing. >> absolutely. i spend a whole chapter in the book going into great detail about the urban burbs. there's a revolution happening where, you know, builders and developers are kind of kind of themselves to try to figure out the right solution and using phrases you never thought you would hear from big kind of mcmansion builders or conventional home builders talking about creating a sense of place and urban, they're using urban terminology, things that come out of the textbook of jane jacobs. this is what people want. it's logical. you want to go somewhere where you can bump into people and get a cup of coffee. you might want to live right in the middle of the city, but you want a sense of lively. >> the important hair of the leave it to beaver era remains. the end of the suburbs, could it be that folks just aren't getting married and having kids the way they used to back in the leave it to beaver years? they're not.

that's another strike shift that i spend a lot of time talking about in the book. nuclear family as we used to know it or maybe still know it is really a shrinking minority. i mean, the kind of household of a mother, father and two children or even any nuclear family like that is becoming a minority. so what you have now the birth rate is falling, the marriage rate is falling >> 50%, the most recent data 50% and 75%. >> in the snooixs even higher before that. and so you know, many suburbs now actually have more senior citizens and baby boomers in them than families with young children which is what the suburbs are supposed to be all about. these are the forces whatever you think about if you love the cul-de-sacs and everything, when you look the an these numbers, that's when it's like this force is coming. and so if you don't have to go to a suburb for schools which is the large reason why people go there, i spoke to so many people who say oh, i have to be there. i wish i could do something different but i'm here for the

schools. people were like apologetic about it. >> i think for a lot of people who have kids, the schools are still a big draw to the suburbs sometimes. >> it is. but it will become less of a draw. that's going to represent a far smaller percentage of the homeownering >> of the overall population. >> it's a very well researched and interesting read. leigh gallagher, thanks for being with us. up next, ari place i spy with the obama white house. running out of steam? you can give yourself a kick in the rear! v8 v-fusion plus energy. natural energy from green tea plus fruits and veggies. need a little kick? ooh! could've had a v8. in the juice aisle. from capital one... boris earns unlimited rewards for his small business. can i get the smith contract, please? thank you. that's three new paper shredders. [ boris ] put 'em on my spark card. [ garth ] boris' small business earns 2% cash back on every purchase every day. great businesses deserve unlimited rewards.

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so something pretty big just what happened at the white house. on friday president obama

announced there are fundamental problems with how the u.s. spies on people. in fact, obama actually kicked off that conference by outlining new reforms to fix our surveillance system. before we even get into whether he's right, you know, whether we're safer with oversight, it's worth appreciating the white house has changed position here. remember, when the guardian newspaper first. exposed the nsa was conducting millions more searches than it told congress, the president insisted there was nothing wrong with the program. first he said the nsa had already achieved the right balance. >> on balance, you know, we have established a process and a procedure that the american people should feel comfortable about. but when you actually look at the details, then i think we've struck the right balance. >> second, even though reports show the nsa was sketly ducking the rules, the president told us the court and its judges had it covered.

>> we also have federal judges that we put in place who are not subject to political pressure. >> and third, president obama said the programs were sufficiently transparent, in fact, when asked if government should explain the new authorities which it had expanded without any public debate at the time, president obama said the court was transparent enough. >> should this be transparent in some way? >> it is transparent. that's why we set up the fisa court. >> so according to president, number one, the spying struck the right balance. number two, the spying court was working fine and number three, the spying program was, as you just heard, sufficiently transparent. that was all just two months ago. on friday, the president basically acknowledged each of those claims was off base. >> in other words, it's not in you have for me as president to have confidence in these programs. the american people need to have confidence in them, as well. i will work with congress to pursue appropriate reforms to

section 215 of the patriot act, the program that collects telephone records i'll work with congress to improve the public's confidence in the oversight conducted by the foreign intelligence surveillance court. known as the fisc. i think we should consider some additional changes to the fisc. we can take steps to put in place greater oversight, greater transparency, and constraints on use of in this authority. we can and must be more transparent. so i've drengted the intelligence community to make public as much information about these programs as possible. >> this is crucial. the president and nsa officials did not start out embracing transpatent or looking to reform the patriot act. they were dragged here by leaks that documented the very problems president obama outlined on friday. and they were pushes here by a of bipartisan vote of no confidence in the spying program just last month. so look i do think the president

was right to finally listen to critics and take action on transparency and right to the release a memo how the nsa has expanded the trot act to search millions of phone records. he was right to call on congress to reform the patriot act and the spying court. in fact, under current rules that court provides an uneven playing field for lawyers which the president mentioned and all its judges are selected by a single republican appointee. we need to fix that, too. but it's hard to look at this whole shift without seeing that the president was wrong before he was right and all those people in washington who told us we should just trust the government, hate the leaker and stop asking questions, they were wrong, too. i think they should be able to see that now because even the government says so. okay. that does it for us on "the cycle." martin, on to you. >> good afternoon. it's wednesday, august 14th. and there is blood shed on the streets of egypt. ♪

>> chaotic situation in see egypt. >> muslim brotherhood is claiming dozens of supporters are dead. >> this is something we've been worrying about. >> the united states condemns the use of violence against protesters in egypt. >> it was predictable but wasn't predicted unfortunately in washington. >> we very called on the military and security forces to show restraint. >> now you have this massive crackdown. >> the world is watching what is happening in cairo. >> this one looks like it is about to get very ugly. >> we begin with flash point egypt and cairo descending into deadly blood shed and chaos after security forces moved into to clear camped occupied by